The Japanese index Nikkei 225 continues consolidating at the top of an ascending channel, which has been progressing since the Christmas 2018 low. In this article, we will comment on our arguments for positioning on the long side.

1. Fundamental traders could maintain their upward vision in Nikkei, supported by the continuation of the quantitative facilitation program by the Bank of Japan (BoJ). On the other hand, the upward sentiment persists in the global equity markets.

2. Price action continues to maintain skyward pressure in the upper trendline of the ascending channel.

3. If the price rises and closes above 23,606 points, Nikkei would activate our position on the buy-side. The target of our conservative scenario is located at 23,828 points. If the Japanese index continues with the forecasted rally, the next target levels are 24,023 points and 24,297 points.

4. The bullish scenario will be invalid if Nikkei closes below 23,243 points, or if the price fails to close above 23,606 points.

5. Geopolitical uncertainties could mark the risk of the bullish scenario. For example, the trade negotiations between the United States and China. We have to remember that December 15 is an important date for the "phase one" agreement in which, if it is not signed, the United States Government could apply new additional tariffs to China.

Nikkei

 

Trading Plan Summary

Entry Level: 23,606 pts.

Protective Stop: 23,243 pts.

1st Profit Target: 23,828 pts.

2nd Profit Target: 24,023 pts.

3rd Profit Target: 24,297 pts.

 


 

Try Secure Leveraged Trading with EagleFX!

Risk Warning: CFD and Spot Forex trading both come with a high degree of risk. You must be prepared to sustain a total loss of any funds deposited with us, as well as any additional losses, charges, or other costs we incur in recovering any payment from you. Given the possibility of losing more than your entire investment, speculation in certain investments should only be conducted with risk capital funds that if lost will not significantly affect your personal or institution’s financial well-being. Before deciding to trade the products offered by us, you should carefully consider your objectives, financial situation, needs and level of experience. You should also be aware of all the risks associated with trading on margin.

Analysis feed

Latest Forex Analysis

Editors’ Picks

GBP/USD off 7-month highs, still firmer as Tories hold the lead

GBP/USD retraces from the new seven-month highs of 1.3180 but remains strongly bid, as weekend polls have reaffirmed a solid lead for PM Johnson's Conservatives. Cable dropped on Friday amid upbeat US data.

GBP/USD News

EUR/USD steadying above 1.1050 amid upbeat German export data

EUR/USD is trading above 1.1050, attempting a recovery after Germany reported an increase in exports in October. EUR/UDS dropped sharply on Friday amid upbeat US Non-Farm Payrolls and weak German industrial output. 

EUR/USD News

Forex Today: US-Sino trade tensions prevail, Boris closer to victory, EUR/USD licking its wounds

Trade talks: President Donald Trump has called on the World Bank to stop lending to China, a move that may aggravate tensions, with only six days to go until Washington is set to slap new tariffs on Beijing. Negotiations continue.

Read more

Gold clings to modest gains above $1460 level, lacks follow-through

Gold edged higher on the first day of a new trading week and recovered a part of Friday's post-NFP slide to multi-day lows.

Gold News

USD/JPY in search of a firm direction, stuck in a range above mid-108.00s

USD/JPY was seen oscillating in a narrow band and consolidated last week’s losses. US-China trade uncertainties continued underpinning the JPY’s safe-haven status. Investors now seemed reluctant ahead of the latest FOMC monetary policy update.

USD/JPY News

Forex Majors

Cryptocurrencies

Signatures